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PA Bulletin, Doc. No. 98-448

RULES AND REGULATIONS

Title 40--LIQUOR

LIQUOR CONTROL BOARD

[40 PA. CODE CHS. 3, 5, 13 AND 15]

License Applications; Duties and Rights of Licensees; Promotion; Special Rules of Administrative Practice and Procedure Regarding Matters Before the Office of Administrative Law Judge

[28 Pa.B. 1418]

   The Liquor Control Board (Board) under the authority of section 207(i) of the Pennsylvania Liquor Code (47 P. S. § 2-207(i)), adopts amendments to §§ 3.52, 5.91, 13.102 and 15.42.

   The Board's regulations amended by this order will achieve the following:

   Section 3.52 (relating to connection with other business) will prohibit licensees from conducting another business on the licensed premises without Board approval.

   Section 5.91 (relating to required report) will require clubs to report a change of officers only at license renewal and a change of manager or steward on an annual basis at license renewal and at license validation.

   Section 13.102 (relating to discount pricing practices) will delete the meal package exception to the ''happy hour'' restrictions and shorten the time frame for restaurants and hotels making arrangements for catered events to 24 hours from 48 hours.

   Section 15.42 (relating to waiver of hearing or appeal) will eliminate the need for clubs and corporations to file a resolution with a waiver of hearing in citation cases.

Comments

   Notice of proposed rulemaking was published at 27 Pa.B. 5430 (October 18, 1997), with a 30 day written public comment period. Written comments were received from the Independent Regulatory Review Commission (IRRC) and from two attorneys relative to the proposed addition of subsection (c) to § 7.7(c) (relating to approval of a transfer of license). The purpose of subsection (c) was to fix responsibility for violations occurring after the Board grants the license transfer but before actual conveyance of the business has taken place at settlement. As proposed, once the Board granted the license transfer, the conduct of the licensed establishment became the responsibility of the new licensee.

   The attorneys expressed concerns regarding the operation of the licensed establishment having to cease while a hurried settlement was arranged. An argument was made that time was needed for adequate preparation for a closing, including funding for the transaction. A second argument was made relative to financing of the transaction not being approved before approval of the license transfer thereby making the proposed regulation ''. . . inconvenient and impractical and not in the best interests of the parties involved in the transfer.''

   The Board responded that the expeditious approval of a license transfer and subsequent timely settlement has always been the expressed desire of licensees and applicants. Furthermore, although sales of alcoholic beverages by the party selling the licensed business must cease, the operation of a restaurant, hotel or golf course as the case might be, could continue. Moreover, the Board does not approve the transfer of a license unless it can be demonstrated to its Bureau of Licensing that proper financing is available to complete the transaction. Existing Board regulations require that the transferee exhibit a deed, lease or bill of sale for the premises and that the purchase price of the business, either in the form of cash or legal obligation as security for the purchase price, shall be held in escrow by an attorney or financial institution. (40 Pa. Code § 7.2).

   IRRC agreed that the proposed language in § 7.7(c) is consistent with the Board's statutory authority and the Board's position that there can be only one licensee. IRRC expressed concern that the proposed subsection will cause unnecessary and unreasonable disruptions in the services that licensed businesses provide to their customers and that it may also place unreasonable responsibility on a new licensee for Liquor Code violations at a business that it does not yet own or operate.

   IRRC recommended that the Board revise the subsection and related provisions in the same chapter to allow for greater flexibility in license transfers. IRRC offered an example and encouraged an examination of alternatives that would provide for a smoother transition between old and new licensees.

   After considering the recommendations of IRRC, the Board decided that the proposal to add § 7.7(c) should be withdrawn.

   No other comments either in support of or in opposition to the proposed regulations were received by the Board during the public comment period.

Fiscal Impact

   These final-form regulations will not impose additional costs on the regulated community, State or local governments.

Regulatory Review

   Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on October 6, 1997, the Board submitted a copy of the notice of proposed rulemaking to IRRC and the Chairpersons of the House Committee on Liquor Control and the Senate Committee on Law and Justice for review and comment. These final-form regulations were submitted to the Chairpersons of the Senate Committee on Law and Justice and the House Committee on Liquor Control and IRRC on January 16, 1998.

   These final-form regulations were deemed approved by the House Committee on Liquor Control and the Senate Committee on Law and Justice on February 5, 1998, and were approved by IRRC on February 13, 1998, in accordance with section 5.1(c) of the Regulatory Review Act.

Contact Person

   Persons requiring an explanation of the final-form regulations, or information related thereto should contact Jerry Danyluk, Liquor Control Board, Room 401, Northwest Office Building, Harrisburg, PA 17124-0001.

Findings

   The Board finds that:

   (1)  Public notice of intention to adopt amendments to the administrative regulations as amended by this order has been given under sections 201 and 202 of the act of July 31, 1968 (P. L. 769, No. 240) (45 P. S. §§ 1201 and 1202) and the regulations thereunder, 1 Pa. Code §§ 7.1 and 7.2.

   (2)  The adoption of the final-form regulations set forth in this order is necessary and appropriate for the administration and enforcement of the authorizing statute.

Order

   The Board, acting under the enabling statute, orders that:

   (a)  The regulations of the Board, 40 Pa. Code Chapters 3, 5, 13 and 15, are amended by amending §§ 3.52, 5.91, 13.102 and 15.42 to read as set forth at 27 Pa.B. 5430. (Editor's Note:  The proposal to amend § 7.7 has been withdrawn by the Board).

   (b)  The Board shall submit this order and 27 Pa.B. 5430 to the Office of the Attorney General for approval as to form and legality as required by law.

   (c)  The Board shall certify this order and 27 Pa.B. 5430 and deposit them with the Legislative Reference Bureau as required by law.

   (d)  This order shall take effect upon publication in the Pennsylvania Bulletin.

JOHN E. JONES, III,   
Chairperson

   (Editor's Note:  For the text of the order of the Independent Regulatory Review Commission relating to this document, see 28 Pa.B. 1185 (February 28, 1998).)

   Fiscal Note:  Fiscal Note 54-51 remains valid for the final adoption of the subject regulations.

[Pa.B. Doc. No. 98-448. Filed for public inspection March 20, 1998, 9:00 a.m.]


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